Avon’s Distribution Channels

Abstract

The case discusses the distribution practices of the world’s largest direct seller of beauty products – US-based Avon. Started as a perfume company by David H. McConnell in New York in 1886, it went on to become an international manufacturer and distributor of beauty, household, and personal care products. Over the years, it expanded into several markets across the world like Russia, Brazil, China, and many others. Avon’s business was based on the traditional marketing model of door-to-door selling through a network of sales representatives (reps) who sold the products directly to consumers. Over the years, its direct selling system underwent changes and emerged as multilevel marketing, wherein the Avon reps recruited and trained other reps and were rewarded for doing so.

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Issues

The case is structured to achieve the following teaching objectives:

• Study the distribution channel adopted by Avon
• Discuss the advantages and disadvantages of direct selling for the company and for the customers
• Discuss and debate whether the model is sustainable
• Discuss ways in which Avon can improve its distribution model and achieve better penetration in the US and other countries
• Examine the distribution challenges faced by McCoy
• Understand how the traditional distribution model can be digitized

Keywords

Cosmetics Industry, Avon, Distribution Channels, Direct Selling, Multi Level Marketing, Sales Representatives, Bonus, Commission Retail outlets, Online Selling, Brochures, Foreign Corrupt Practices Act, Beauty products, Online retail

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